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Small firms face squeeze on work

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Small practices will increasingly have to look for niche market work and leave most projects in the hands of big companies, according to Michael Jefferies, chairman of architectural giant WS Atkins, commenting on a new RIBA survey of small firms.

Developments such as the Private Finance Initiative (PFI) and cut-throat supply chain management techniques are concentrating large amounts of work in the hands of the large firms, he admitted, forcing small practices to either grow or specialise.

His comments serve only to reinforce the bleak results of a survey conducted by the RIBA Small Practice Sub-committee released last week. The survey, of 1,112 practices employing less than 10 people, discovered that small firms are getting little public work and are relying on unprofitable domestic projects for most of their income. Consequently, income is low.

In what will make uncomfortable reading for any small or solo practitioner, the survey shows that only one in five small practices regularly work for government bodies, public authorities or housing associations, while two thirds depend on cost-conscious private home-owners for work.

This is worrying as public work is traditionally the way new and small firms build a reputation.

'We can apply economies of scale and we can use buying power which the smaller practices can't, ' Jefferies told the AJ. 'You now need sufficient critical mass to support the technical overheads.'

Jefferies, who employs more than 200 architects, forecast that the profession would soon divide into two kinds of practice: large, multi-disciplinary firms of more than 70 architects and small ones of around 10 concentrating on conceptual work or technical expertise such as conservation. 'I think this is already happening.

The big names now get most of the work, ' he said.

Elspeth Clements, chair of the sub-committee, blames PFI for much of the problem. Under PFI, public authories often commission large numbers of buildings, for example schools, in one package and insist that architects (with developers and facilities management companies) actually manage the buildings after completion.

Clements says this is a 'major concern' because the PFI regime squeezes small firms out of the marketplace - and because clients end up with 'bland and uniform products'.

'The fact is that this type of work is no longer feeding down to smaller practices, ' said Clements.

'A large number of extremely good firms started up by building small schools, for example. But now practices are not getting access to this kind of work. It's turning into a monopoly by a small number of large firms.'

Alan Hurst, chair of the RIBA Solo Practioners Group in the north west, is not concerned about large firms securing the big contracts - but he does question what constitutes a large project.

'We should let the big boys handle the big stuff, but we have got to be clear on definitions; £1 million is not a big job, ' said Hurst, a solo practioner for 12 years. 'I've recently completed a £0.8 million factory, but I still didn't get rich doing that project.

Sometimes I work on projects where the minimum hourly rate seems attractive.'

Hurst's annual salary is still limited to between £20,000 and £30,000, which the survey shows is typical for a small practice principal.While 53 per cent of small practice survey respondents earn less than £30,000, only 11 per cent of principals in practices of more than 10 people are in this wage bracket. 14 per cent of small practice principals earn more than £50,000, compared with 48 per cent of their peers in large practices.

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